Cipolla v. Team Enterprises, LLC

Background

The plaintiffs were part-time California promotional specialists who worked at social events, where they set up tables, advertised products, interacted with potential customers, provided samples, and took photographs. They used the Brand Trend app to select shifts, record their time, complete event recaps, and perform other required duties. All promotional specialists used their personal cellphones to access the app.

The plaintiffs alleged that Team Enterprises and New Team LLC failed to pay for off-the-clock work and overtime, failed to provide required meal and rest breaks or premium payments for missed breaks, and failed to reimburse business expenses. The alleged expenses included mileage, parking, tolls, kit-retrieval costs, and cellphone use. Team Enterprises paid team leads a flat five dollars to retrieve promotional kits but did not track the dates or distances involved.

A prior order denied an earlier class-certification motion because the then-class representative did not meet the typicality requirement. The plaintiffs were allowed to identify a different representative and file a fourth amended complaint. The proposed class involved approximately 357 promotional specialists who signed a 2019 arbitration agreement containing a carve-out for pending litigation, including this case.

Motion to dismiss

The defendants moved to dismiss for lack of subject-matter jurisdiction, arguing that the complaint did not adequately allege at least five million dollars in controversy under the Class Action Fairness Act. The defendants’ expert estimated that no more than $3,109,848 could be recovered, while the plaintiffs’ expert estimated potential recovery of $5,872,500.

The court held that the five-million-dollar threshold was met and that jurisdiction under 28 U.S.C. § 1332(d)(2) existed when the action began. The court found that the complaint’s estimate could be supported by basic arithmetic and that it was unfair to criticize the estimate because the plaintiffs did not have full class-profile data when they filed the complaint. The court also found the plaintiffs’ expert calculations plausible even if some assumptions were reduced.

The defendants separately challenged Jamie Arias as an adequate class representative based on inconsistencies between her declarations and deposition testimony. The court found those errors minor and concluded that they did not create prejudice to the class. The motion to dismiss was DENIED.

Class certification

Class certification requires compliance with Rule 23(a), including numerosity, common questions, typical claims, and adequate representation. For the proposed damages class under Rule 23(b)(3), common questions must predominate over individual questions, and a class action must be superior to other methods of resolving the dispute.

The court found no practical class-wide method of proving most of the proposed wage-and-hour theories. For example, some promotional specialists were never team leads and therefore never retrieved kits; some were not told to arrive early or did not follow such instructions; and there was no standardized record showing how long individual event recaps took or whether the five-dollar payment was inadequate. The defendants also did not track kit-retrieval dates and locations, making it difficult to determine who would qualify for driving-expense reimbursement.

The court certified three issues for class treatment:

The court did not certify reimbursement claims concerning mileage, tolls, or parking expenses from retrieving kits. It also did not certify the other proposed off-the-clock, break, or expense theories. The motion for class certification was DENIED IN PART AND GRANTED IN PART.

Disposition

The defendants’ motion to dismiss was DENIED. The plaintiffs’ motion for class certification was DENIED IN PART AND GRANTED IN PART. The court scheduled trial for January 22, 2024, and directed counsel to submit a proposed class-notice form and distribution plan.